Prospectus

The European Securities and Markets Authority (ESMA), the EU’s securities markets regulator, today publishes a joint Annual Report on Prospectus Activity and Sanctions for 2020.

ESMA found that the number of prospectus approvals across the European Economic Area (EEA) dropped by almost 5% compared to 2019, which appears to indicate that the Covid-19 crisis did not have the anticipated impact on approvals. In addition, only Belgium’s Financial Services and Markets Authority (FSMA) and Norway’s Finanstilsynet imposed prospectus related sanctions in 2020 with the majority imposed by the FSMA.

Prospectus Activity

  • around 46% of prospectuses approved were in the form of base prospectuses and 91% were drawn up as single documents as opposed to tripartite prospectuses;
  • slightly more than 78% of prospectuses approved in 2020 related to non-equity securities with the most frequent security type being debt securities with a denomination of at least €100,000;
  • the number of EEA prospectuses passported to one or more host countries decreased by around 6% relative to 2019; and
  • Luxembourg and Germany accounted for most prospectuses passported to other EEA countries in 2020.

Prospects Sanctions

  • 58 administrative sanctions and other administrative measures were imposed by NCAs for infringements of the Prospectus Regulation, of which 57 were issued by the FSMA,  mainly related to offerings of securities without the prior publication of a prospectus

These reports provide information about trends in the prospectus area, which are available here.

 

Further information:

Dan Nacu-Manole

Communications Officer

   +33 (0)1 58 36 52 06

@   press@esma.europa.eu

The European Securities and Markets Authority (ESMA), the EU’s securities markets regulator, has today updated its Questions and Answers on the following topics:

The European Securities and Markets Authority (ESMA), the EU’s securities markets regulator, has today issued a Public Statement on the prospectus disclosure and investor protection issues raised by special purpose acquisition companies (SPACs).

Prospectus disclosure

The statement, in view of both the complexity and the diversity of SPAC transactions, sets out ESMA’s expectations on how issuers should satisfy the specific disclosure requirements of the Prospectus Regulation to enhance the comprehensibility and comparability of SPAC prospectuses. This should help to ensure that national competent authorities (NCAs):

  • take a coordinated approach to the scrutiny of SPAC prospectuses;
  • provide SPACs with an understanding of the disclosure that NCAs will expect them to include in their prospectuses; and
  • support investors’ analysis of these transactions.

Investor protection

The statement highlights ESMA’s view that SPAC transactions may not be appropriate investments for all investors due to risks relating to dilution, conflicts of interests in relation to sponsors’ incentives and the uncertainty as to the identification and evaluation of the target company. In addition, ESMA emphasises the importance of the proper application of the MiFID II product governance rules and their role in ensuring investor protection.

Anneli Tuominen, Interim Chair, said:

“There has been a significant rise in SPAC activity in EU capital markets this year, and with this comes growing interest from investors. Therefore, it is essential that investors are provided with the information necessary to understand the structure of SPAC transactions before making any investment decisions.

“ESMA’s statement will contribute to maintaining a high level of investor protection and promote a common consistent supervisory convergence by regulators across the EU.”

ESMA and NCAs will continue to monitor SPAC activity to determine if additional action is necessary to promote coordinated supervisory action aimed at preserving investor protection.

Background

SPACs are shell companies that are admitted to trading on a trading venue with the intention to acquire a business and are often referred to as blank check companies. The persons responsible for setting up SPACs are the sponsors, who typically have significant expertise in one or more economic sectors and use the SPAC to acquire companies in those sectors. SPACs sell their shares, often together with warrants, to investors to finance the acquisition. After the acquisition, the SPAC becomes a normal listed company.

 

Further information:

Dan Nacu-Manole

Communications Officer

   +33 (0)1 58 36 52 06

@   press@esma.europa.eu

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